1. A court's review of questions of statutory interpretation or construction is de novo.

2. The most fundamental rule of statutory interpretation and construction is that the intent of
the legislature governs if that intent can be ascertained. A court's first task is to determine
the legislature's intent through the statutory language it employs, giving ordinary words
their ordinary meaning. When a statute is plain and unambiguous, a court must give effect
to its express language, rather than determine what the law should or should not be. The
court will not speculate on the legislative intent and will not read the statute to add
something not readily found in it. If the statute's language is clear, there is no need to
resort to statutory construction. If a plain reading of the text of a statute yields an
ambiguity or a lack of clarity, statutory construction becomes appropriate. In such
circumstances, a court must move outside the text of the provision at issue and examine
other evidence of legislative intent, such as legislative history, or employ additional canons
of statutory construction to determine the legislature's meaning.

3. A statute is presumed constitutional and all doubts must be resolved in favor of its validity.
If there is any reasonable way to construe a statute as constitutionally valid, the court must
do so. A court not only has the authority, but also the duty, to construe a statute in a
manner that it is constitutional, if the same can be done within the apparent intent of the
legislature in passing the statute. However, a court may not rewrite a clear and
unambiguous statute to make it pass constitutional muster.

4. Going concern value is a potential component of reasonable value, as that term is used in
K.S.A. 12-527. Going concern value should be considered for inclusion in any appraisers'
award and any reconsideration of the same in district court.

5. The legislature's use of the nonspecific "institute an action" language in K.S.A. 12-527
endows a party dissatisfied with an appraisers' award with the right to trial de novo in the
district court on the issue of the reasonableness of the award. The party challenging an
appraiser's award under K.S.A. 12-527 bears the burden of demonstrating it to be
unreasonable. The district court factfinder, whether ultimately a judge or a jury, must
decide whether the party challenging an award has carried its burden by a preponderance
of the evidence, and, if so, the correct reasonable value, based on all of the evidence
presented in the district court proceeding.

6. The reasonable value contemplated by K.S.A. 12-527 is equivalent to just compensation
under the federal Constitution.

Carl W. Hartley, of Carl W. Hartley, L.L.C., of Paola, argued the cause,
and Gary H. Hanson, of Stumbo,
Hanson, L.L.P., of Topeka, and Todd A. Luckman, of the same firm, were with him
on the brief for appellant.

Timothy P. Orrick, of Foth & Orrick, L.L.P., of Overland Park, argued
the cause, and Jason B. Prier,
Renee M. Gurney, and Anthony J. Orrick, of the same firm, were with
him on the brief for appellee.

The opinion of the court was delivered by

BEIER, J.: Rural Water District #2, Miami County, Kansas, appeals the district court's
decision affirming an appraisers' award of $133,200 for territory annexed by the City of
Louisburg. We discern five potential questions raised by this appeal: (1) Were the appraisers and
the district judge required as a matter of law to consider or award going concern value in arriving
at the award amount? (2) What was the appropriate procedure to be followed in a district court
action to challenge an appraisers' award under K.S.A. 12-527? (3) What standard of review or
standard of proof was to be applied in district court? (4) If the district judge employed the
appropriate procedure and applied the correct standard of review or standard of proof under
K.S.A. 12-527, was the process adequate to satisfy the Fifth Amendment? and (5) If the district
judge employed the appropriate procedure and applied the correct standard of review or standard
of proof, and the process was adequate to satisfy the Fifth Amendment, did the Water District
carry its burden of demonstrating that the appraisers' award amount was unreasonable?

Factual and Procedural History

Rural Water District #2 (the Water District), established in the 1960s as a quasi-municipal
corporation, serves approximately two-thirds of Miami County, or approximately 252,590 acres,
including the land surrounding the City of Louisburg (the City).

The city, in 37 annexations, annexed approximately 1,900 acres of the Water District's
service area. The annexed land included 22 meters serving customers and 500 linear feet of 2-inch
service line.

After the annexations, the Water District filed a petition for mandamus and mandatory
injunction in district court, seeking an order requiring the City to appoint a qualified appraiser and
follow the process established in K.S.A. 12-527. K.S.A. 12-527 provides:

"(a) Whenever a city annexes land located within a rural water district . . . , the city
shall negotiate with the district to acquire title to all facilities owned by the water district and
used for the transportation or utilization of water distribution to the water district benefit units
within the area annexed by the city. Title shall vest in or become the property of the city upon
payment by the city to the water district of the reasonable value of such property, as agreed upon
by the governing body of the city and the board of directors of the district. If the district is unable
to reach agreement with the city on the reasonable value for such facilities, then the reasonable
value shall be determined in the following manner:

(1) The district and the city shall each select one qualified appraiser and
the two appraisers so selected shall then select a third appraiser for the purpose of
conducting appraisals so as to determine reasonable value of the property, facilities and
improvements of the district annexed by the city.

(2) The agreement or decision of at least two of the three appraisers
shall
be the fair market value presented to the city for payment and the district for acceptance.

(3) If either the district or the city is dissatisfied with the decision of the
appraisers, then the district or the city may institute an actionin the district court to
challenge the reasonableness of the value determined by the appraisers."

After the Water District filed its petition, each party appointed an appraiser. Although the
district judge ordered the parties' designated appraisers to select a third appraiser, it appears from
the district judge's ultimate written decision that he chose the third appraiser.

The district judge then instructed the panel of three appraisers on its role in arriving at a
reasonable value for the annexed territory:

"1. 'Reasonable value' means the value of the property, facilities, and
improvements as determined by you. Reasonable value is that amount in terms of money that
such property, facilities and improvements are worth as you shall determine. Reasonable value
means full compensation for everything or element of value taken, and that nothing less than
such reasonable compensation can be legally awarded.

"2. In determining the compensation to be allowed, you must give
consideration to
all factors you determine that have bearing on the reasonable value. There is no factor excluded
or mandatorily included. You may determine (1) whether or not any compensation is owed, and
(2) if compensation is owed, what is the reasonable value thereof.

"3. In determining reasonable value, you should consider any element of value
including the going concern value and the value of physical assets, but your consideration must
not be speculative, conjectural, or remote.

"4. [The Water District] is entitled to full reasonable compensation for all
property,
facilities and improvements annexed."

The appraisers conducted a 2-day hearing, recorded by a court reporter, in which the
parties provided extensive evidence supporting their positions. The Water District's expert
witnesses valued the annexed territory at $8,490,000 and $12,895,898. The City's expert witness
valued the territory at $65,200.

Two of the appraisers on the panel set the reasonable value for the Water District's award
at $133,200; they did not explain how they arrived at this figure. The appraiser selected by the
Water District dissented, stating: "[I]t is my opinion that the value computed by the other
appraisers did not include all of the elements contemplated by [K.S.A. 12-527], the instructions to
the appraisers, and . . . the evidence presented at the hearing." He opined that the two other
appraisers erred by not awarding an amount for the potential value related to the right to serve
annexed areas or the costs the Water District incurred in preparing to serve those areas. Further,
he criticized the majority's valuation opinion for failing to include "at least a brief description of
the rationale used and the items considered or not considered."

The Water District filed a petition in the district court to challenge the reasonableness of
the award and argued that it was entitled to a trial de novo. In response, the City argued that no
trial de novo was required and that the district court's standard of review should be merely
whether there was substantial competent evidence in the record to support the award.

The district judge determined that the standard of review should be whether there was
substantial competent evidence to support the appraisers' award. He then ordered that the parties
submit only evidence already presented to the appraisers – either on the record or by
reading the
hearing transcript aloud. The district judge also placed the burden on the Water District to prove
the appraisers' award was unreasonable, a feature of the procedure the Water District does not
dispute. The district judge further stated that he would not adjust the appraisers' award unless he
concluded it was so outside a "zone of reasonableness" that it was unlawful.

During the proceedings in district court, the City acknowledged that the appraisers should
have considered the going concern value of Water District's property, facilities, and
improvements. But it contended that the Water District erroneously expected to receive the value
attached to an imagined right – including the present value of theoretical future customers,
based
on an incorrect population density calculation.

The district court affirmed the appraisers' $133,200 award, holding the Water District to a
negative fact finding standard that demanded it demonstrate the appraisers' award was based on
an arbitrary disregard of undisputed evidence or an extrinsic consideration such as bias, passion,
or prejudice. Moreover, the district court discounted the precedential value of City of
DeSoto v.
Consolidated Rural Water District No. 6, 23 Kan. App. 2d 407, 930 P.2d 624, rev.
denied 261
Kan. 1084 (1997), in which a panel of our Court of Appeals had remanded an appraisers' award
for an evidentiary hearing and consideration of going concern value. The district court reasoned
that neither City of DeSoto nor K.S.A. 12-527's legislative history required an award
to include
the value to be derived from future customers; such a value should be included in an award only if
it would be reasonable to do so. Finally, the district judge focused on the legislative history of a
1987 amendment to the statute, in particular, a letter written by legislator Robert Vancrum that
suggested a specific valuation formula was deleted from the statute purposely, thus enabling
appraisers to consider any element of value in setting an award.

The Water District appealed and filed a motion requesting this case be transferred to this
court. Our court granted the motion.

Going Concern Value

The question of whether the appraisers and the district judge were required as a matter of
law to consider or award going concern value in arriving at an award requires analysis of K.S.A.
12-527. Our court's review of questions of statutory interpretation or construction is de novo.
Higgins v. Abilene Machine, Inc., 288 Kan. 359, 204 P.3d 1156, 1158 (2009).

The most fundamental rule of statutory interpretation and construction is that the intent of
the legislature governs if that intent can be ascertained. Winnebago Tribe of Nebraska v.
Kline,
283 Kan. 64, 77, 150 P.3d 892 (2007). The court's first task is to determine "the legislature's
intent through the statutory language it employs, giving ordinary words their ordinary meaning."
State v. Stallings, 284 Kan. 741, 742, 163 P.3d 1232 (2007).

"When a statute is plain and unambiguous, we must give effect to its express
language,
rather than determine what the law should or should not be. We will not speculate on the
legislative intent and will not read the statute to add something not readily found in it. If the
statute's language is clear, there is no need to resort to statutory construction." Graham v.
Dokter
Trucking Group, 284 Kan. 547, 554, 161 P.3d 695 (2007).

"If, on the other hand, a plain reading of the text of a statute yields
an ambiguity or a
lack of clarity, statutory construction becomes appropriate. In such circumstances, a court must
move outside the text of the provision at issue and examine other evidence of legislative intent,
such as legislative history, or employ additional canons of statutory construction to [determine]
the legislature's meaning." Board of Leavenworth County Comm'rs v. Whitson, 281
Kan. 678,
685, 132 P.3d 920 (2006).

Moreover, if constitutional interpretation of a statute is required, our court has held:

"A statute is presumed constitutional and all doubts must be resolved in favor of its
validity. If there is any reasonable way to construe a statute as constitutionally valid, the court
must do so. This court not only has the authority, but also the duty, to construe a statute in a
manner that it is constitutional, if the same can be done within the apparent intent of the
legislature in passing the statute. [Citation omitted.] However, we may not rewrite a clear and
unambiguous statute to make it pass constitutional muster. [Citation omitted.]" Martin v.
Kansas
Dept. of Revenue, 285 Kan. 625, 629-30, 176 P.3d 938 (2008).

The plain language of K.S.A. 12-527 is nonspecific and internally variable. A city acquires
"title to all facilities owned by the water district and used for the transportation or utilization of
water distribution to the water district benefit units within the area annexed by the city," and it is
required to pay a water district "the reasonable value of such property." If no agreement is
reached on the "reasonable value for such facilities," then the "reasonable value" will be
determined by the procedures set forth: (1) Three appraisers will conduct appraisals to determine
the "reasonable value of the property, facilities and improvements of the district annexed by the
city"; (2) the decision of at least two of the three appraisers "shall be the fair market value" to be
paid; and, (3) if the parties disagree with the appraisers' award, the reasonableness of the "value"
can be challenged in district court.

We conclude from these assorted formulations that K.S.A. 12-527 contemplates that the
appraisers' and, possibly later, the district court's calculation of the reasonable value covers at
least the value of facilities, property, and improvements. The statute makes no mention of going
concern value.

Given the statute's silence on this precise point, we must look beyond its plain language to
determine whether the concept was meant to have a role in the calculation as a component of the
reasonable value of facilities, property, and improvements or as necessary additions to it.

Examining the legislative history of K.S.A. 12-527, we learn that the statute was originally
enacted in 1968. At that time, the statute required an annexing city to pay the value of:

"[F]acilities used for the transportation or utilization of water belonging to the water
district. . . .
In addition to compensation for such physical facilities the city may pay to the water district an
amount equal to that portion of outstanding indebtedness of the district which is properly
attributable to the portion of the water district annexed by the city." L. 1968, ch. 80, sec. 1.

The 1968 statute provided that the value of "such property" would be determined "as agreed
by
the governing body of the city and the board of directors of the district, or if such agreement is
not made, then as determined by the city." If a city's unilaterally set value was disputed, the statute
permitted a district to "bring an action in the district court to determine the reasonableness of the
amount of compensation fixed and determined by any such city." K.S.A. 1968 Supp. 12-527(a).

The legislature amended K.S.A. 12-527 in 1986. While the initial description of the value
to be paid remained the same, the legislature then described "reasonable value" and required
consideration of certain bonded indebtedness:

"(b) Such compensation shall include an amount to reimburse the district for any
bonded
indebtedness of the district existing at the time the annexation ordinance took effect and
attributable to the annexed area based on the following factors:

(1) The cost of the construction of the facilities within the annexed area in
proportion to
the construction costs for the entire district at the time of annexation;

(2) the number of benefit units connected to and served within the annexed area in
proportion to the number of benefit units connected to and served by the entire district at the time
of annexation; and

(3) the current revenue received from benefit units within the annexed area in
proportion to the current revenue received from all benefit units of the entire district at the time
of annexation." K.S.A. 1986 Supp. 12-527(b).

The 1986 version of the statute still provided in the first instance for an agreement between a
city
and a water district on value; failing that, for the city to set the value; and, in the event of a
disagreement, for the water district to "bring an action" in district court to determine the
reasonableness of the value set by the city. K.S.A. 1986 Supp. 12-527(a).

The next year, 1987, the legislature passed another amendment to K.S.A. 12-527. The
governor, however, vetoed this amendment. The language the governor rejected shifted the
power to set a value unilaterally from cities to water districts. It also listed specific "factors" to be
among those included in "reasonable value":

"(1) An amount to reimburse the district for any bonded indebtedness of the
district
existing at the time of payment by the city and attributable to the annexed area based upon the
ratio of the benefit units in the annexed area compared with the total benefit units served by the
district; and

"(2) an amount to reimburse the district for all the facilities to be transferred to the
city
based upon the ratio of the benefit units in the annexed area compared with the total benefit units
served by the district, applied to the original construction cost adjusted to the current construction
value and depreciated at a straight line rate over a forty-year period. The depreciated reduction of
value shall be applied for the actual number of years the system has been in service or 30 years
whichever is the lesser of the time expended; and

"(3) an amount equal to the gross revenue loss for the immediate past one business
year
from those benefit units in the annexed area or the actual current benefit unit costs for those
benefit units in the annexed area whichever is the greater." H.B. 2480

Ultimately in that session, the legislature passed and the governor signed a later bill
amending K.S.A. 12-527 to its current format. This version omitted the language vetoed by the
governor earlier that year and that portion of the language added in 1986 that had required
consideration of certain bonded indebtedness and set forth the factors used to determine it. In
support of this second effort at a 1987 amendment, Representative Vancrum wrote a letter to the
House Energy Committee explaining the new language. Vancrum said that the amendment would
force cities to pay for a water district's assets and customer base; would permit appraisers to
consider any element of value; and would make the statute's language comparable to that used in
K.S.A. 66-1,176, which requires "fair and reasonable compensation" when annexation affects
retail electric suppliers.

In addition to the legislative history described above, case law may guide us to a decision
in this case. Although K.S.A. 12-527 has rarely been the subject of litigation, the Court of
Appeals addressed the meaning of its current language in City of DeSoto. In that
case, De Soto
annexed land belonging to the largest existing customer of Consolidated Water District No. 6,
arguing it should pay only for the value of the water district's physical facilities located on the
land. The water district sought compensation for the going concern value of the land taken.
Although both parties, following K.S.A. 12-527, had selected appraisers, De Soto brought a
declaratory judgment action in district court to determine the correct method for arriving at a
reasonable value under the statute. This action was brought before the appraisers had settled on
an amount. City of DeSoto, 23 Kan. App. 2d at 408-09.

The district court initially declined to determine the correct statutory method, ordering the
appraisers to determine the value under each of the parties' suggested methods. The appraisers
valued the physical assets at $19,300 and the going concern value at $41,000. City of
DeSoto, 23
Kan. App. 2d at 409. Without further hearing, the district court granted summary judgment to the
water district in the amount of $41,000, holding:

"'[T]he term reasonable value used in K.S.A. 12-527 is an open ended term granting to the
appraisers . . . the discretion to consider whatever evidence they deem to be relevant in
determining the reasonable value of the property taken. . . . K.S.A. 12-527 does not limit the
value of the property taken to the value of the physical property taken.'" City of
DeSoto, 23 Kan.
App. 2d at 409.

De Soto appealed. Reviewing K.S.A. 12-527's language and legislative history, the Court
of Appeals endorsed the district court's decision that going concern value should be considered in
the setting of an award under the statute.

"[A]ppraisers should be instructed to take into consideration the going concern value of
the
facilities within an annexed area in determining fair market value. Such an approach recognizes
and properly considers not only the physical assets taken by a city but also the going concern
value, which a city receives and a water district loses. To interpret the statute as only providing
for the physical value of the assets would financially damage a water district to the advantage of a
city. We do not believe that the legislature intended such an unfair outcome." City of
DeSoto, 23
Kan. App. 2d at 411.

Nevertheless, the Court of Appeals reversed and remanded the case for a district court
evidentiary
hearing, because the parties were never "given an opportunity . . . to challenge the reasonableness
of the appraisal before the entry of summary judgment." City of DeSoto, 23 Kan.
App. 2d at 411.

Based on the legislative choice evident in the current general wording of K.S.A. 12-527,
as opposed to the specificity of its earlier iterations, and on the content of the Vancrum letter and
on the common sense of the Court of Appeals' decision in City of DeSoto, we hold
that going
concern value is a potential component of "reasonable value," as that term is used in K.S.A.
12-527. As a matter of law, under the open-ended statute, going concern value should be
considered
for inclusion in any appraisers' award and any district court's reconsideration of the same in
district court.

In this case, however, this holding does not necessarily take the Water District where it
wants to go. The record shows that the appraisers were instructed explicitly by the district judge
to include going concern value in their calculus. It is obvious that the appraisers and the district
court understood the possible importance of this element. Consistent with K.S.A. 12-527, the
appraisers were free to decide whether going concern value was pertinent and, if so, the amount
the evidence demanded be attributed to it as part of the reasonable value of the annexed territory.
Any re-examination of the award in the district court was governed by the same legal standard.

Thus the Water District's complaint actually is not that the appraisers were prevented from
considering or failed to consider going concern value, but, as the dissenting appraisers' comments
made clear, that they did not place a high enough number next to that potential component of
reasonable value. The trouble with this is the statute's undifferentiated, or, perhaps, egalitarian
approach. No city and no water district is irrevocably bound to any particular component or any
specific formula in the presentation of evidence or argument about "reasonable value" under
K.S.A. 12-527. The appraisers in this case and in any similar water district annexation case may
evaluate any and all factors bearing on "reasonable value." They may assign those factors any or
no weight and any or no dollar amount, as compelled by the evidence and its persuasive force.
There will be times when going concern value is enormously influential and a high-dollar
component of reasonable value. At other times, going concern value will have little impact and
may reasonably be set at zero. The statute allows for the entire continuum of outcomes; any point
on that continuum may be selected.

Procedure in District Court

We now turn to the question of whether the district judge employed the appropriate
procedure in the Water District's challenge to the appraisers' award under K.S.A. 12-527. This
question also requires analysis of K.S.A. 12-527. Thus our standard of review is unlimited.
Higgins, 288 Kan. at 361.

The Water District asserts that it was entitled to a full opportunity to trial de novo in the
district court, including any necessary discovery and a completely new factfinding before its
choice of a district judge or jury without any limitations arising from the earlier proceeding before
the appraisers. It advances five arguments on this issue: (1) The original language of K.S.A.
12-527 permitted full judicial review; (2) the phrase "institute an action," as used in the current
version of K.S.A. 12-527, indicates that a challenge to an appraisers' award is not an appeal but a
new action eventually leading to trial; (3) City of DeSoto requires that a district
court's review be
de novo; (4) K.S.A. 12-527 is similar to K.S.A. 26-508 governing eminent domain, which
requires de novo review of an award; and (5) K.S.A. 12-527 should not be compared to K.S.A.
77-607, which pertains to review of an agency adjudication, because agencies are required to
make factual findings while appraisers are not.

In response, the City contends that the legislature did not use the phrase "de novo" in
K.S.A. 12-527, although it has done so in other statutes. The City also argues that a district court
should treat an appraisers' award like an agency decision.

The Water District's first argument – that the original language of the statute
somehow
compels trial de novo – is without merit.

First, we cannot imagine a situation in which we would be justified in ignoring updated
and applicable language of a statute in favor of interpreting and applying conflicting language
used in an earlier version of it. The constitutional doctrine of separation of powers and the
prudential considerations of limited institutional competence command that we work with the
content of a statute as it is, not as it was.

Second, K.S.A. 12-527(a)(3) has provided since 1987: "If either the district or the city is
dissatisfied with the decision of the appraisers, then the district or the city may institute an
action
in the district court." (Emphasis added.) The statute's 1968 and 1986 versions
provided a city the
power to establish the amount of compensation it would pay to a water district for annexed
territory. These versions then provided that, if the water district disagreed with the city's amount,
the district's "board of directors [may] bring an action in the district court
to determine the
reasonableness of the [amount of compensation] fixed and determined by any such city."
(Emphasis added.) We see no distinction of meaning or function among the operative language
"may bring an action" in 1968, "may bring an action" in 1986, and the current "may institute an
action." That being said, we also are not persuaded that the Vancrum letter's casual reference to
the district court proceeding as an "appeal" rather than a de novo review or a new trial dictates a
ruling in favor of the City on this issue. In short, the legislative history of this particular statute
gives us nothing particularly enlightening on the nature and extent of the procedure to be
employed by the district court.

The Water District's second argument – that the phrase "institute an action"
necessarily
implicates an expansive trial de novo rather than a limited appeal – prompts us to look
beyond this
particular statute to other places where our legislature has employed the phrase. We see it fairly
frequently. SeeK.S.A. 21-4012 ("the department of health and environment,
or local department
of health, may institute an action in any court of competent jurisdiction to enjoin repeated
violations of this act"); K.S.A. 21-4017 (same); K.S.A. 40-3619 ("[t]he rehabilitator, upon an
order for rehabilitation, within one year or such other longer time as applicable law may permit,
may institute an action or proceeding on behalf of the insurer"); K.S.A. 40-3627 ("[t]he liquidator
. . . may institute an action or proceeding on behalf of the estate); K.S.A. 44-806a ("[o]n
complaint of the secretary of state that any labor organization has failed to make the filing
required by said statutes, it shall be the duty of the county or district attorney, or the attorney
general, to institute such action in the district court of Shawnee County, Kansas"); K.S.A. 55-215
("[t]he holder of such lien shall within six months institute an action to foreclose and enforce the
lien in the manner now provided by law, or shall within six months institute an action in
attachment or replevin"); K.S.A. 58-3064 ("the commission may institute an action in the district
court of the county in which the person resided . . . for an injunction to enforce compliance with
the act or rules and regulations"); K.S.A. 60-4115 ("the plaintiff's attorney may institute an action
in the district court against any person"); K.S.A. 65-1828 ("[t]he board may institute such actions
in the courts of competent jurisdiction as may appear necessary to enforce compliance with
[sanitation standards]"); K.S.A. 79-2801 ("it shall be the duty of the county attorney or county
counselor to institute an action in the district court, in the name of the board of county
commissioners . . . by filing a petition with the clerk of the court"). In addition, this court has used
the phrase "institute an action" when referring to a typical litigation eventually promising a full
trial in the first instance in district court. See Teepak, Inc. v. Learned, 237 Kan. 320,
329, 699
P.2d 35 (1985) ("whether the action is barred by Teepak's failure to institute an action against
Learned prior to the running of the statute of limitations relative to medical malpractice is
rendered moot"); Johnsonv. Schrader, 150 Kan. 545, Syl. ¶ 1, 95
P.2d 273 (1939) ("[w]here a
party institutes an action in a district court of a particular county to partition lands within the
county, and the defendants file their answers, and the court thereafter renders a judgment within
its power, the judgment is void"); Martin, Governor v. State ex rel. Hall, 39 Kan.
576, Syl. ¶ 18
P. 472 (1888) ("[a]s a general proposition, a county attorney of one county cannot institute an
action, in the nature of a public prosecution, in the name of the state, in another county [other]
than his own").

Although this essentially "plain language" or "ordinary meaning" argument cuts in favor of
the Water District, it is not fully and finally dispositive on the nature of the process in district
court. In each of the other statutes and in each of the three cases cited above for comparison, no
prior full adversary proceeding in another forum is contemplated before the commencement of a
district court action. K.S.A. 12-527, in contrast, sets up an award process before a panel of
appraisers that at least practically precedes, and may eliminate the theoretical or practical need
for, any district court involvement. Indeed, in this case, the proceedings before the appraisers
amounted to a deluxe model. The appraisers heard direct and cross-examination of witnesses and
legal argument. They were instructed by the district court on their task. A formal record was
taken and transcribed. The Water District is correct that this unique procedural history, launched
as it was by the City's initial refusal to follow the statutory appraisal procedure, does not control
our analysis of the statute, which must govern generally in the future as well as resolve the dispute
that arose between these parties in the past. Nevertheless, the existence of a more or less
elaborate appraisal process makes interpretation of K.S.A. 12-527 more complex than it would be
in a simple plain language or ordinary meaning case.

The Water District's third argument that City of DeSoto establishes its right to
a trial de
novo in the district court over reads that case. The design and scope of district court procedure
were not at issue in City of DeSoto. The Court of Appeals' reversal and remand to
district court
for an evidentiary hearing on the issue of reasonableness may have suggested that evidence
beyond the universe of material on which the appraisers had based their decision would be
admitted in the hearing, but it did not place that issue beyond principled dispute.

Both the Water District's fourth argument and the City's response use statutory language
governing eminent domain as a reference point. K.S.A. 2008 Supp. 26-508 on eminent domain
procedure provides:

"(a) If the plaintiff, or any defendant, is dissatisfied with the award of the
appraisers,
such party, within 30 days after the filing of the appraisers' report, may appeal from the award by
filing a written notice of appeal with the clerk of the district court. The appeal shall be deemed
perfected upon the filing of the notice of appeal. In the event any parties shall perfect an appeal,
copies of such notice of appeal shall be mailed to all parties affected by such appeal, within three
days after the date of the perfection thereof. An appeal by the plaintiff or any defendant shall
bring the issue of damages to all interests in the tract before the court for trial de
novo. The
appeal shall be docketed as a new civil action, the docket fee of a new court action shall be
collected and the appeal shall be tried as any other civil action. The only issue to be determined
therein shall be the compensation required by K.S.A. 26-513, and amendments thereto."

Unfortunately, review of the eminent domain statute for assistance in this case obscures
rather than illuminates. The legislature enacted K.S.A. 26-508 in 1963, 5 years before it enacted
K.S.A. 12-527. Although K.S.A. 26-508 has been amended several times since, it has consistently
characterized the district court action initiated by the party unhappy with an appraiser's award as
an "appeal." At the same time, it has explicitly specified that the district court shall conduct a "trial
de novo." K.S.A. 12-527 simply uses neither term. The fact that the distinct language of K.S.A.
26-508 has been interpreted and applied one way or the other does not inevitably demand a
similar or a different interpretation and application of K.S.A. 12-527.

Likewise, the statutory language governing review of agency decisions found in K.S.A.
77-606, et seq., again compared by both the Water District and the City, is of limited
utility. As
the Water District points out, agency adjudications require findings of fact while appraisals under
K.S.A. 12-527 do not. This distinction alone goes a long way toward explaining the legislature's
explicitly narrow prescription for court review of agency adjudications, requiring them to be
upheld if supported by substantial competent evidence in the record. See K.S.A. 77-621(c)(7).
The legislature has not chosen to exercise similar control in K.S.A. 12-527.

Aside from the parties' arguments on appropriate district court procedure, we note that the
district judge in this case relied in part on a comparison of K.S.A. 12-527 to K.S.A. 66-1,176,
which codifies annexation procedures for retail electric suppliers, which Vancrum had mentioned.
As with the eminent domain and administrative procedure statutes, however, there are marked
differences between the language used in K.S.A. 12-527 and K.S.A. 66-1,176. K.S.A. 66-1,176
provides for fair and reasonable compensation to be paid to a terminated retail electric supplier.
The amount is to be "mutually agreed upon" and shall be the sum of certain factors. See K.S.A.
66-1,176(c).

"In the event that the parties are unable to agree upon an amount of compensation
to be
paid . . . either party may apply to the district court having jurisdiction where any
portion of the
facilities are located, for determination of compensation. Such determination shall be made by
the court sitting without a jury." (Emphasis added.) K.S.A. 66-1,176(d).

Finally, our own research efforts have turned up no helpful law from our sister states.
Iowa appears to be the only one of them with a statute somewhat similar to K.S.A. 12-527. See
Iowa Code § 357A.21 (2000). But it provides for arbitration if a water district and city fail
to
agree on a fair price. Furthermore, like K.S.A. 12-527, Iowa Code § 357A.21 has rarely
prompted litigation. The one case referencing it does not bear on the issue before us. See
Clay
Regional Water v. City of Spirit Lake, Iowa, 193 F. Supp. 2d 1129 (N.D. Iowa 2002)
(staying
litigation to determine water district and city boundaries until pending case in district court
complete).

All of the above-referenced potential sources for guidance on the appropriate procedure to
be employed by the district court under 12-527, standing alone and in combination, leave much to
be desired. We conclude, however, that the legislature's use of the nonspecific "institute an action"
language in K.S.A. 12-527 endows a party dissatisfied with an appraisers' award with the right to
trial de novo in the district court on the issue of the reasonableness of the award. This trial de
novo means the "action" instituted under the statute may include all of the conventional attributes
of a civil lawsuit, e.g., discovery, exchange of expert reports, the possibility of a jury.
The party
challenging an appraiser's award bears the burden of demonstrating it to be unreasonable.

In arriving at this decision, we rely on the admittedly imperfect analogs of other statutes
using the "institute an action" language. We trust that, if we have misapprehended the legislature's
intention in employing this phrase in this context, it will say so through prompt amendment of
K.S.A. 12-527.

Because the Water District was not permitted a trial de novo in the district court when it
challenged the appraisers' award in this case, we must reverse and remand for the appropriate
procedure to be employed. We recognize the district judge's laudable sensitivity to the Water
District's rights through his design and supervision of a Cadillac appraisal process between the
warring parties before him but rule that it cannot be viewed as a substitute, even in this single
case, for what we view as required by the governing statute. The lack of clarity in that statute led
directly to this result, despite the judge's substantial efforts to reach a balanced and just outcome.

Standard of Review or Standard of Proof

Before leaving the subject of the expectations on remand, we must also address the
standard of review or standard of proof to be applied in the district court.

The focus of the trial de novo to which we have held the Water District to be entitled is
reasonable value. The district court was correct in stating that the appraisers' award should not be
overturned and replaced unless it falls outside a "zone of reasonableness." He was not correct to
the extent he determined that the appraisers' award must be upheld if supported by substantial
competent evidence or that the Water District must overturn a negative factual finding,
i.e., show
an arbitrary disregard of undisputed evidence or an extrinsic consideration such as bias, passion,
or prejudice. Both the substantial competent evidence and the negative factual finding standards
are appellate standards of review generally unsuitable for application as standards of proof in a
trial de novo. See, e.g., State v. King, 288 Kan. 333, 204 P.3d 585
(2009); Owen Lumber Co. v.
Chartrand, 283 Kan. 911, 928, 157 P.3d 1109 (2007). Furthermore, to the extent the
appraisers
implicitly made any negative factual finding, they did so without discrimination between the Water
District and the City. They adopted an amount somewhere between those advanced by the parties.

As mentioned, the Water District concedes that it bears the burden of proving the
appraisers' award unreasonable, as it is the party challenging it. The district court factfinder,
whether ultimately a judge or a jury, must decide whether the Water District has carried that
burden by a preponderance of the evidence, and, if so, the correct reasonable value, based on all
of the evidence presented in the district court proceeding.

Fifth Amendment

The next potential issue in this appeal is constitutional adequacy. Because we have held
that K.S.A. 12-527 requires that case to be reversed and remanded for employment of the
procedure and application of the standard of proof set out above under K.S.A. 12-527, we need
not examine whether the rejected procedure and standard met Fifth Amendment requirements.
Assuming arguendo that the Fifth Amendment comes into play when a city annexes a territory
served by a water district, we hold that the reasonable value contemplated by the statute is
equivalent to just compensation under the federal Constitution. This holding is consistent with our
obligation to resolve any doubts in favor of a statute's validity. See Martin, 285 Kan.
625, 629-30,
176 P.3d 938 (2008). In addition, our reading of the statute gives any party unhappy with an
appraisers' award all of the process that could possibly be due to it.

Discharge of Burden

Because of our reversal and remand, we do not reach the last potential issue on appeal:
Whether the Water District carried its burden of demonstrating that the appraisers' award was
unreasonable. The analysis above means the Water District will have another chance.

Reversed and remanded for further proceedings consistent with this opinion.

EDWARD E. BOUKER, District Judge, assigned.1

1REPORTER'S NOTE: Pursuant to the authority vested in
the Supreme Court by art. 3, § 6(f)
of the Kansas Constitution, District Judge Bouker was appointed to hear case No. 100,332 due to
the vacancy on the court created by Chief Justice McFarland's retirement.